5 smart pieces of money advice financial planners will tell you for free

If there’s anyone you should turn to for honest and objective money advice, it’s a financial planner .

Certified financial planners have a fiduciary responsibility to provide guidance and recommendations that are in your best interest not theirs, their company’s, or anyone else’s.

That said, financial planners can still offer sound and actionable advice when they’re not sitting with a client one-on-one. Here’s some of the smart money advice financial planners have shared with us:

1. ‘Work hard and save most of your money’

Renee Kwok, certified financial planner and the CEO of TFC Financial , a $1 billion financial planning and asset management firm based in Boston, tells her young daughter to “work hard and save most of your money,” she told Business Insider .

But, Kwok added, how much you save is almost as important as where you put it. “You can’t collect interest or grow your stacks of cash if they are sitting in an envelope in your desk drawer,” Kwok tells her daughter.

A high-yield savingsaccount or money-market account is often the best place to keep savings so it grows, but remains easily accessible. While you won’t wreck your financial life bynot storing savings in a high-interest account, your money will almost certainly lose value thanks to inflation. Online savings accounts, as opposed to big retail banks, usually offer the best rates, which can be up to 200 times more than a checking account.

“Even in today’s low interest rate environment,” Kwok said, earning some interest is far better than none. And if you have an established emergency fund, consider investing in index funds to grow your money even more, she said.

2. Tackle your ‘bad debt’ first

Debt isn’t a death sentence, but it can certainly hold you back. To help people balance their debt and savings goals, personal-finance company SoFi created a three-step method, Lauren Anastasio, a certified financial planner at SoFi , told Business Insider.

“We call this the ‘ debt fireball method ,’ and that’s where we attack the highest interest rate debt first, the bad debt,” Anastasio said. That means putting as much as you can toward credit card debt and high-interest rate personal loans, while still paying the minimum on all other balances.

“Once you’ve eliminated that high interest rate debt, even if you have student loans or a car loan or a mortgage, focus on funneling as much cash as possible toward your savings,” Anastasio says. Savings goals should first and foremost include building an emergency fund and saving for retirement , and perhaps also putting away money for a down payment or travel.

“Having cash on hand, having liquidity, is hugely important, especially during times of uncertainty,” Anastasio said. “Then, only once we’re truly satisfied and feel secure with that savings should we consider making extra payments to pay other debt off sooner.”

3. ‘Bucket’ your savings goals

Luis Rosa, a certified financial planner who founded the firm Build a Better Financial Future , suggests managing your savings goals with a “bucketing” method. After you’ve listed out all your fixed and variable expenses for the month, put “goal-specific money” think: funds for a vacation, wedding, or down payment on a house in various “buckets,” Rosa previously told Business Insider .

Ideally, these are high-yield savings accounts at different banks or even the same one, as long as they’re not lumped together with your spending money. After separate accounts are set up, decide how much you can afford to contribute monthly to each goal and set up auto deposit. If it helps, think of savings as an expense , at least for your highest-priority goals, even if it’s just $10 a month.

Rosa said he likes bucketing because it makes tracking savings progress even easier. “This also helps with the motivational aspect of staying the course,” Rosa said. “Some days when you ask yourself ‘Why am I working so hard?’ you can see how much progress you’ve made toward a future goal and it reinforces the behavior. You’re more likely to stick to your goals if you can track its progress.”

4. Avoid ‘lifestyle creep’

“Live below your means” is perhaps the most repeated financial advice of the modern era, and for good reason. You can’t get ahead if you’re spending all your income, but it’s easy to get caught up when your friends are hitting milestones or you begin to earn more money yourself.

“I always refer to it as ‘lifestyle creep’ because one of the big things that people can do that’s an advantage to them is keep their fixed expenses somewhat stable and reasonable for what they make,” Katie Brewer, a Dallas-based certified financial planner and founder of Your Richest Life , previously told Business Insider .

Brewer says that working on stabilizing fixed expenses is something she regularly helps her 30-something clients with, many of whom are working couples and couples preparing for kids.

Of course, Brewer said, if you’re making good money you should have the freedom to spend it how you wish, as long as your lifestyle doesn’t overtake your income.

5. ‘Don’t wait’ to buy life insurance

Not everyone needs life insurance , but if you assume you don’t need it only because you’re young, you could be sorely mistaken, certified financial planner Jeff Rose wrote in an article for Business Insider . The purpose of life insurance is to provide livelihood for a person or multiple people who are dependent on your income. It can also be incredibly useful for repaying outstanding debts after your death.

“If you do have one or more people who are dependent on your income, or other financial obligations that may become the responsibility of someone else upon your death, you’ll need to have a policy,” Rose wrote.

“If so, don’t wait! Life insurance coverage will never be less expensive than it will be in your 20s. You’re young and probably in good health, and that’s the absolute best time to buy life insurance,” he said.

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